How to Record Customs Fees and VAT for Imported Goods



When importing goods into Saudi Arabia, Value-Added Tax (VAT) is not charged on the invoice issued by the foreign supplier. Instead, the VAT is collected by the Zakat, Tax and Customs Authority (ZATCA) when the goods enter the Kingdom. For this reason, you need to manually record the VAT in the system so that it appears correctly in your VAT return and is counted as part of your input tax.

In this tutorial, we’ll walk through a complete, practical scenario that demonstrates how to record this type of transaction step by step, ensuring compliance with the requirements of the Saudi Customs regulations.

Step 1: Record the invoice issued by the foreign supplier

Since the supplier is located outside Saudi Arabia, VAT is not applied to the invoice. However, you still need to record the full invoice amount converted to Saudi Riyals.

To do this, click on Purchases from the main menu, then click on Bills, and finally click the Record bill manually button.



Start by recording the supplier bill received from abroad.

Make sure to convert the bill amount into Saudi Riyals, and enter the SAR value based on the exchange rate used for the supplier’s foreign currency.



Step 2: Record the VAT paid to Customs

Since VAT is collected directly by the ZATCA when goods enter the country, you need to reflect this amount in the system so that it appears in your VAT return.

If you've already recorded the foreign supplier’s invoice, you do not need to re-enter the goods value when recording the import VAT. However, you still need to record the VAT amount accurately so that it is properly reflected in your VAT return.

To do that, follow these steps using a new bill Invoice:

1. Add a new line item representing the value of the goods for VAT purposes (e.g., SAR 1,000). - Use an interim account such as "Clearing Account" or "Customs Settlement" in the Account field. - In the Tax field, select “VAT at Customs 15%”.
2. Add a second line item with the same amount but negative (e.g., -1,000 SAR). - Use the same account as in the first line. - Do not apply any tax on this line.



Step 3: Recording customs fees (if applicable)

In some cases, your company may be charged actual customs fees either by the customs broker or directly by the ZATCA. These fees are not considered part of the goods value, but should be recorded as a separate expense in the system.

To record customs fees in Wafeq:

1. Go to the Bills page and click Record bill manually to create a new bill.
2. Add a new line representing the fee, and select an appropriate account, such as Customs Charges.
3. In the Tax field, choose the applicable VAT rate as per the customs declaration. If the fees are not subject to VAT, select Non-VAT.



Step 4: Verify that the import VAT appears in the VAT return

Click on Reports from the main menu, then click on VAT.

Select the time period during which the bills were recorded.

Look for the section labeled VAT on purchases and confirm that the VAT amount appears there.